SEBI interim order taken seriously, will monitor development that may affect deal: SPE on Sony-Zee merger

Sony Pictures Entertainment (SPE) said it has taken the Securities and Exchange Board of India (SEBI) interim order, that banned Essel Chairman Subhash Chandra and Zee Entertainment Enterprises MD and CEO Punit Goenka from holding directorial positions for siphoning off ZEEL funds, very seriously and it will continue to monitor the developments that may affect Sony-Zee merger deal.

A statement from Sony Pictures Entertainment (SPE), which has its headquarters in Culver City, read, “There have been several erroneous press reports recently speculating about the future of ZEE’s planned merger with SPNI following SEBI’s interim order against Subhash Chandra and Punit Goenka. We take very seriously the SEBI interim order and will continue to monitor developments that may affect the deal.”

Sony's board is unhappy with the developments around Zee Entertainment in India, several media reports had stated adding that the Japanese multinational may consider to invoke force majeure and material adverse clauses in the proposed merger. 

Recently, SEBI in its reply to the Securities and Appellate Tribunal (SAT) on the Zee Entertainment Enterprises’s plea called for urgent action against the promoters in the alleged fund diversion case to safeguard the management, investors and other stakeholders.

In the interim order on June 12, SEBI had barred Chandra and Goenka from holding the position of director or any key managerial personnel in any listed company for siphoning off funds of the media firm. Both Chandra and Goenka had moved SAT seeking a stay on the SEBI order, citing injustice.

SEBI also submitted that the appellants had not produced any material to indicate they had suffered any prejudice by not getting a personal hearing before the interim order was passed.

SAT on Monday said it will continue the hearing of Zee Entertainment Enterprises' plea, challenging market regulator Sebi's interim order, on June 26.

Meanwhile, the National Company Law Tribunal (NCLT) hearing on the potential merger of ZEEL with Sony Pictures Networks India is also on June 26.

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